Author: Linda Silberman*
Published: August 2012
Description: Hans Smit combined the worlds of arbitration and litigation: at Columbia Law School, he taught civil procedure and served as the Director of the Law School’s Project on International Procedure; and he was known world-wide for his expertise as an international arbitrator. In his scholarship and in his practice – as both arbitrator and litigator – he exhibited a command of both subjects and of their relationship to each other. Recent developments affecting the enforcement of both arbitration awards and foreign judgments have highlighted the impact of basic concepts of civil procedure on arbitration, and Hans had his own distinct views about that interrelationship. I examine two of those issues in this tribute to him. One question that has arisen is whether an independent basis of adjudicatory jurisdiction over the defendant is necessary in order to enforce a foreign arbitral award. At least in the United States, the answer to that question has been “yes.” Although Article V of the New York Convention does not identify the lack of a jurisdictional nexus with the award debtor as a defense to enforcement of a foreign arbitral award, almost every court in the United States that has considered the issue has held that an enforcing court must have either personal jurisdiction over the award debtor or quasi-in-rem jurisdiction over the property. The leading case, Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., involved a Netherlands corporation (Glencore Grain) that sought enforcement of a London arbitration award rendered against an Indian rice exporter for breach of contract. Rejecting Glencore’s argument that neither the New York Convention nor its implementing legislation required personal jurisdiction over the defendant and that lack of personal jurisdiction was not among the New York Convention’s defenses to recognition and enforcement, the Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal for lack of jurisdiction. The court found that the requirement of jurisdiction did not emanate from what the Convention and Chapter 2 of the Federal Arbitration failed to say, but flowed from the affirmative command of the Due Process Clause of the U.S. Constitution, which the Convention could not abrogate. The Court of Appeals for the Second Circuit reached the same conclusion in Frontera Resources Azerbaijan Corp. v. State Oil Company of the Azerbaijan Republic, holding that either personal …
*Martin Lipton Professor of Law, New York University School of Law.